Harmonic Inc (HLIT)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 5.46 | 3.77 | 5.42 | 8.87 | 10.56 |
| Receivables turnover | 4.27 | 5.72 | 5.67 | 5.39 | 4.03 |
| Payables turnover | 11.89 | 6.76 | 5.99 | 13.20 | 7.49 |
| Working capital turnover | 10.35 | 26.69 | 5.08 | 3.96 | 6.49 |
The activity ratios of Harmonic, Inc. provide insights into the company's efficiency in managing its assets and liabilities.
1. Inventory turnover:
- In 2023, Harmonic's inventory turnover was 3.52 times, indicating that the company sold and replaced its inventory approximately 3.52 times during the year.
- The ratio has fluctuated over the past five years, with higher turnovers in 2019 and 2020 compared to the more recent years, suggesting a potential change in inventory management strategies.
2. Receivables turnover:
- Harmonic's receivables turnover demonstrates how many times the company collected outstanding receivables during the year.
- A decreasing trend is observed from 5.76 in 2022 to 4.30 in 2023, indicating a possible lengthening of the collection period or a change in the customer base.
3. Payables turnover:
- The payables turnover ratio reveals how quickly the company pays off its suppliers.
- Harmonic's payables turnover has been inconsistent over the years, with a significant increase in 2023 compared to the previous year, suggesting variations in payment terms or supplier relationships.
4. Working capital turnover:
- The working capital turnover measures how efficiently the company generates revenue relative to its working capital.
- Harmonic's working capital turnover was highest in 2022 and has since decreased, indicating a potential change in working capital management or revenue generation.
Overall, analyzing these activity ratios can help stakeholders understand Harmonic, Inc.'s operational efficiency and effectiveness in managing its assets and liabilities.
Average number of days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 66.83 | 96.86 | 67.32 | 41.14 | 34.58 |
| Days of sales outstanding (DSO) | days | 85.56 | 63.84 | 64.41 | 67.73 | 90.66 |
| Number of days of payables | days | 30.69 | 54.02 | 60.92 | 27.65 | 48.73 |
To analyze Harmonic, Inc.'s activity ratios, we will focus on three key metrics: Days of Inventory on Hand (DOH), Days of Sales Outstanding (DSO), and Number of Days of Payables.
1. Days of Inventory on Hand (DOH):
- The trend in DOH shows an increasing level of inventory holding period over the past five years, indicating that Harmonic, Inc. is taking longer to convert its inventory into sales.
- In 2023, the DOH is 103.78 days, which is higher compared to the previous years. This suggests that Harmonic may be carrying excess inventory or facing challenges in managing its inventory levels efficiently.
2. Days of Sales Outstanding (DSO):
- The DSO metric tracks the average number of days it takes for Harmonic to collect its accounts receivable.
- The DSO has been fluctuating over the period, with a notable increase in 2023 to 84.98 days compared to prior years. This indicates that Harmonic is taking longer to collect payments from its customers, potentially signaling issues with credit policies or collection efficiency.
3. Number of Days of Payables:
- The Number of Days of Payables metric represents the average number of days it takes for Harmonic to pay its suppliers.
- There is variability in the payables period, with a decrease to 47.65 days in 2023. A lower payables period suggests that Harmonic is settling its payables more quickly, which could impact cash flow management and supplier relationships.
Overall, the analysis of Harmonic, Inc.'s activity ratios reveals potential challenges in inventory management, accounts receivable collection, and accounts payable settlement. It is crucial for Harmonic to closely monitor these metrics and implement strategies to optimize working capital efficiency and overall operational performance.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 16.46 | 15.57 | 11.74 | 8.33 | 16.83 |
| Total asset turnover | 0.79 | 0.87 | 0.72 | 0.61 | 0.66 |
The analysis of Harmonic, Inc.'s long-term activity ratios reveals interesting trends over the past five years. The fixed asset turnover has shown fluctuation, with a noticeable increase from 2019 to 2020, followed by a decrease in the subsequent years. This ratio indicates that the company generated $16.57 in sales for every dollar invested in fixed assets in 2023, showing a relatively efficient use of fixed assets to generate revenue.
On the other hand, the total asset turnover has also varied over the years, reaching its peak in 2022 before declining in 2023. This ratio indicates that Harmonic, Inc. generated $0.79 in sales for every dollar invested in total assets in 2023, reflecting a decrease in overall asset efficiency compared to the previous year.
Overall, while the fixed asset turnover suggests a proficient utilization of fixed assets to generate sales, the total asset turnover indicates a slight decrease in the efficiency of utilizing total assets to generate revenue in 2023 compared to the prior year. This analysis underscores the importance of monitoring both ratios to assess the company's effectiveness in utilizing its assets for revenue generation.